{UAH} ANATOMY OF AN OIL CURSE?

The Petroleum Authority of Uganda responded to my public interest queries on the profits Uganda stands to make from it's oil. One thing I noticed is how the institution is never precise in it's figures and doesn't even issue estimates in the key areas of overall profits or even recoverable oil reserves. One could easily suspect an attempt to confuse rather than clarify. Though they actually confirm my concerns about Uganda getting a pittance from it's own oil, and only after the oil companies, the oil brokers and everyone else has gotten their shares from the country's oil.

So let me be clear on a few concerns on behalf of the ordinary citizens of Uganda. Less than 1% of Ugandans will get contracts or be employed in the country's oil & gas industry. Therefore the overall majority of Ugandans, over 99%, will not in any way be involved in upstream, midstream, downstream, or sidestream aspects of the oil industry. Yet the noise of oil promises has been mysteriously reduced to the jobs and contracts in the oil & gas industry.

What about the promise of extraordinary nationwide development from the revenue from oil sales?

In their formal response, the Petroleum Authority elaborately avoided answering this key question.

They confirmed that the oil companies will be taking between 60 and 70% of revenue from oil sales, yet to take all that lion share begs the commonly asked question by ordinary Ugandans: Is it the oil companies oil, or is it Uganda's?

The explanation that these companies have to recover their estimated $10 billion dollar investment in extraction of our oil actually doesn't add up if we consider the quantities of extractable oil. At todays market price they would be making upwards of $40 billion dollars for an investment of $10 billion dollars. That's a profit of four times their investment.

Meanwhile the Petroleum Authority cannot say for sure if and when Uganda will get anything from the sale of its own oil. I have not seen any official estimate.

Secondly what the average Ugandans are wondering is why isn't the share of oil revenues for the oil companies established as a fixed percentage, say 50% for example, which does not leave a whole 10% grey area ("between 60% and 70%") that could be a loophole for corruption and kickbacks?

Furthermore, when Total (or whoever) sells Uganda's oil on the international market on behalf of the people of this country, who is there to monitor fairness in Uganda's interests, and in exactly whose bank account does Total deposit Uganda's share after taking there's?

Despite oil being a highly technical industry, these are the questions that the ordinary Ugandan needs to hear answers about in the simplest understandable language.

Clearly there must be a transparent and inclusive process for the country's oil production & sales activities. The people of Uganda deserve this at the minimum.

They also want to know how exactly will 100% of Ugandans around the country benefit from their national resource. They want to hear about improved government services, better schools and hospitals, more tarmacked roads, and a greater economy with world class strategic infrastructure projects around the country, all from their oil revenues. Therefore where are the official government planning documents on how much will be made from the oil reserves, and what exactly will be done for the people of this country with their oil profits, citizens which the Petroleum Authority of Uganda serves, not just the one percent who are in the oil & gas industry.

Signed: Mr. Hussein Lumumba Amin

Kampala, Uganda.

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